Is Vancouver Dying? A Restaurant Vitality Perspective

There has been much attention these days focused on claims that we have reached "Peak Vancouver" and our gorgeous city is now on the decline.  Stories of millennial migrations, absurd property valuations, potential bubbles, and of course, the million dollar teardown trend highly in our local news cycle to the delight of news organizations in our otherwise dull city.  

But how much of this is media hyperbole and how much is fact?  Personally, I don't believe that Vancouver is dying and by two gross measures: our population and our economy, this City is doing very well. And more importantly, can we lump all of Vancouver into one giant failure bubble, or are there nuances to the vitality of this City?

Perhaps a better question is: Are there geographic expressions to Vancouver's vitality? I've already commented on population dynamics in the City, locations of alienated desire and of course where to find good beer.  What else can we map then?

Naturally, my thoughts turn to the service industry (restaurants) where two good ideas come to mind:

  1. We can measure the health of a neighbourhood's local economy through its retention of established business, specifically in this case, local restaurants. The theory here being that neighbourhoods with high restaurant survival rates are good places to do business (and therefore are nice to live in as well); and
  2. We can also measure local economic health through an analysis of economic growth.  In this case, we can look at the rate of formation for new restaurants in the City. The theory here being that neighbourhoods with high business formation rates speak to growing markets and exiting places to be.

Before we go any further let's nail down these two concepts:

  • Restaurant Survival Rate - Percentage of all restaurants that were open in 2011 still open in more or less the same location in 2016; and
  • Restaurant Formation Rate - Percentage change in total number of active restaurants by 2011-2016

Now, let's suppose that these two factors: restaurant survival rates and new restoraunt formation rates are not correlated.  If that's the case (and it is: r-squared of 0.0034!), then we can create a simple two variable model to classify the City:

ChangeAnalysis.jpg
  1. Areas where survival rates are low and formation rates are negative are likely areas that are, for lack of a better word, in decline. This means that in these areas long term businesses are failing and no new ones are taking their spots.  These are the doomsday neighbourhoods predicted Vancouver haters.
  2. Areas where survival rates are low and formation rates are positive are likely areas that are experiencing rapid change.  In Vancouver the four letter term for this would be: gentrification (gtfn?). 
  3. The third category is where we have negative rates of new business formation, but high survival rates for established restaurants.  I don't have a great term for these hoods but we can call them static zones.  That is to say, existing places do well, but its tough to get a foothold in these areas
  4. Finally, we have areas where we have a growing number of restaurants and high survival rates of existing establishments.  These areas can be considered by any definition as being economically healthy.

OK! Map it out already!

The figure below shows the state of all of Vancouver's 1,498 class 1 and class 2 restaurants in business today plus the 196 that were in business in 2011 but were not replaced by another business at that location. Overall, Vancouver has a 62% five year survival rate which is pretty good. Vancouver also has a 9.2% overall growth rate in restaurants, which is excellent considering our population only went up by 5% (cheap credit perhaps?).

Note the patches of green in International Village and Olympic Village...

Some Analysis...

To do some analysis, I made a layer comprised of Business Improvement Areas (BIAs) and the remainder of neighbourhoods based on some logical groupings to give me analytical samples of reasonable size.   Once this was done, I completed a simple overlay to get the following info:

There is a lot going on in the image above, so let's discuss quadrant by quadrant (please note that I use the question mark here "?" to indicate that this is just my off-the-cuff analysis of the data. In no way am I placing value judgement on any of these neighbourhoods or BIAs):

  • Economically Healthy? By my definition, most areas in Vancouver have healthy economics for restaurants. Overall, most areas of the City are seeing greater than 60% five-year survival rates and within these areas, most are seeing growth through the generation of new establishments.  Really interesting is the Chinatown BIA - which ranks as the best place to have a restaurant in the City (68% survival rate and an astounding 55% increase in new restaurants over 5 years).  Second to the Chinatown BIA, the Victoria Drive BIA (at Vic and 41st) has a 70% survival rate and has seen a 40% increase in new establishments!  Rounding out the "super growth" category are Hastings Crossing BIA, Other Mount Pleasant (ie Olympic Village and SE False Creek) and areas in the West End outside of the West End BIA (ie Coal Harbour).  All of these can be considered as gentrification candidates where suvival is low (RIP Crime Lab), but that is offset by tremendous growth.  
  • Gentrifying? Speaking of gentrification, the next quadrant certainly speaks to this occurrence... The Strathcona BIA (which stretches from Gore to Clark along Hastings, is seeing all sorts of new restaurants come (and go), but also has extremely low survival rates at 50%.   The "Other Downtown" area (ie International Village and North False Creek) has the worst survival rate in the City at 43% despite positive growth of 12%.  In this area, I suspect that the pace of rapid change has displaced many prior establishments and new ones cannot seem to succeed in this market (the same can be said for that mall....).  Finally we have the Hastings North BIA, the land of breweries is less kind to restaurants with only 50% of establishments surviving from 2011 to 2016.  Something tells me however, that this trend will stabilize as development along Hastings finally slows down.
  • Static? In my opinion these three areas (Point Grey Village BIA, Marpole BIA and Kits outside of the BIA) are the most interesting.  One the one hand they have very high business survival rates, on the other hand all have seen an 8% drop in the number of restaurants in the 2011-2016 time period.  Perhaps these are ultra-competitive markets, or perhaps some of these surviving restaurants simply persist with an older clientele.  Either way, if Point Grey Village BIA can find a way to grow, it would seem to be a great place to do business.
  • Declining? Something is going on in the Kits 4th Aveneue BIA and on Robson Street.  My current theory is that restaurants are being displaced by clothing stores. and other restaurants simply can't handle the rent shock of these newly minted "high-end" streets. I would welcome any other theories that explain a 48% five year survival rate and an 8% decline is restaurants over five years.

Conclusions?

I would encourage folks who have read this far, to start to think about what this data means and view it in the context of other economic trends in the City.  Personally, if we take a look at Vancouver dining scene, it appears to be vibrant growing and remarkably stable for most of the City. Taken this way, I would say that Vancouver is a long way from dying.  some small parts may be sick, but the rest of the City seems to be thriving in the foodie arena.

As always I welcome comments, feedback and differing points of view.  If you like this type of analysis, feel free to contact me and I can probably customize for it your needs.  Next week I promise to get back to beer and love, I promise.

Aaron

Bonus Dynamic Map

I'm playing around with mapbox for some of my online figures. Let me know what you think of this as well.

 

Analytical data below:

Area Name New restaurant at new location - 2016 Business from 2011 - not replaced New Business Replacing one from 2011 - same location Still In Business at same location 2011-2016
Kitsilano Fourth Ave. BIA 3 6 15 20
Other Downtown 12 7 15 17
Robson St. BIA 6 7 8 16
Dunbar Village BIA 0 2 3 7
Hastings - North BIA 6 3 18 21
Other Fairview 13 15 31 65
Strathcona Area BIA 4 1 6 7
Downtown Vancouver BIA 63 58 63 176
Other Kitsilano 6 11 16 46
Collingwood BIA 6 3 7 13
South Granville BIA 2 1 7 13
West End BIA 23 9 42 77
West Broadway BIA 7 3 9 18
Mount Pleasant BIA 8 6 12 36
Marpole BIA 1 2 2 10
Other SE Van 6 4 6 20
Other West Side 8 5 10 32
Other Kingsway 15 10 18 61
Fraser St. BIA 2 1 4 11
Other NE Van 12 6 7 24
Yaletown BIA 8 3 13 35
Kerrisdale BIA 6 4 5 21
Point Grey Village BIA 1 2 2 13
Other Marpole 7 2 4 10
Commercial Dr. BIA 19 5 16 43
Other South Main St 13 3 13 34
Other West End 7 1 5 9
Cambie Village BIA 8 3 7 26
Gastown BIA 11 2 11 32
Other Mount Pleasant 24 5 11 25
Victoria Drive BIA 11 2 5 16
Hastings Crossing BIA 13 0 8 12
Chinatown BIA 16 4 3 15